Template-Type: ReDIF-Paper 1.0
Series: Tinbergen Institute Discussion Papers
Creation-Date: 2007-01-04
Number: 06-115/1
Author-Name: Matthijs van Veelen
Author-Email: C.M.vanVeelen@uva.nl
Author-Workplace-Name: Universiteit van Amsterdam
Title: Evolution of Strategies in Repeated Games with Discounting
Abstract: In repeated games there is in general a large set of equilibria. We also know that in the repeated prisoners dilemma there is a profusion of neutrally stable strategies, but no strategy that is evolutionarily stable. This paper investigates whether and how neutrally stable strategies can be upset in a process of mutation and selection. While neutral stability excludes that mutants have a selective advantage themselves, it does not rule out the possibility that mutants that are neutral can enter a population and create a selective advantage for a second mutant. This will be called an indirect invasion and the central results show that, for high enough continuation probability, there is no strategy that is robust against indirect invasions. Such stepping stone paths out of equilibrium generally exist both in the direction of more and in the direction of less cooperation.
Classification-JEL: C73
Keywords: Repeated games; evolutionary stability; robust against indirect invasions.
File-Url: https://papers.tinbergen.nl/06115.pdf
File-Format: application/pdf
File-Size: 371248 bytes
Handle: RePEc:tin:wpaper:20060115